September 23, 2019 | 5 min read

Digital banking thrives on modern payment platforms

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In this three-part blog series (read part 1 and part 2 here) we’ve explored the rise of fintechs and the growth of digital banking in what was once the sole domain of traditional institutions. We’ve highlighted how these new brands have challenged tradition by unbundling bank products, building up large customer bases, and now diversifying into digital banking services. With 73% of US bank customers aged 18–34 willing to try a fintech product, it’s time to explore how these digitally native brands are innovating upon traditional deposit services for the next wave of customers.

What is a Digital Account?

Digital accounts give customers direct access to cash through a mobile app and a card that they reload through bank account links, direct deposit or in-app peer-to-peer payments.

They’ve been successful for fintechs by integrating the user experiences we enjoy on our smartphones and social media services into financial services like lending and peer-to-peer payments. Now they’re doing the same with digital banking services. Following their customer’s lead, companies like Square, SoFi, Kabbage, Stash and PayPal are bundling the convenience, immediacy and transparency of cash accounts with their already popular financial services.

Why Fintechs are Offering Digital Accounts

A wide field of fintech providers are introducing compelling service suites that go well beyond the traditional checking account, attracted to the potential to increase customer stickiness, grow card usage and gather more spending data on their customers to provide insights into new opportunities. Their customers are drawn to these services because they enhance the convenience of the card they have in their wallet with services like direct deposit, bill pay, point of sale access, ATM access and FDIC Insurance on their money.

The Power of the Card

Integrating the convenient features of digital accounts with existing financial services is one of the biggest trends in fintech in 2019. The vehicle that brings these digital services into the physical world is the card. Fintech brands have introduced more innovation into the design of their cards to enhance their visual appeal and encourage their customers to keep them top-of-wallet, but it’s the technology behind the cards that’s really delivering the value proposition consumers expect.

Uncovering the Tech Behind the Cards

Fintechs integrating digital accounts into their existing services are entering a new landscape where technology, payments expertise and partnerships are critical success factors. Offering digital accounts that work like checking accounts with access to these funds through debit or prepaid card programs without actually being a bank, requires close partnerships. There are few partners on the market who have the resources to help fintechs deliver digital accounts that seamlessly integrate with existing systems, are easily configured into their winning UX, and offer fraud, regulatory and compliance support and tools.

There are three general approaches that Marqeta has seen fintech innovators take:

  1. Partner with a payments technology company that has multiple bank and card network partnerships,

  2. Partner with a bank that has payments technology,

  3. Build their own technology and partnership networks.

Partnering with a technology company with a modern payments platform and open API, empowers fintech innovators to customize and quickly iterate their products and services as they learn from customers in real time. Marqeta’s modern card issuing platform helps fintech companies offering new digital account services bring customized services to market in weeks, not months. Our platform, open API and advanced analytics provide unprecedented control for companies to instantly issue cards, authorize transactions, manage cardholder data security, and offer in-app provisioning directly to digital wallets to manage payment operations with ease.

Some fintechs with ample resources and technology expertise choose to build their own payments platforms, but most partner with other fintech innovators like Marqeta to provide the infrastructure, payments experience and partnerships necessary to keep them on pace with their customer’s needs. Finding the right platform is key to tapping into the speed needed to enter, compete and adapt in this high-growth sector.

If you’d like to learn more about our Digital Account product or how Modern Card Issuing can impact your business, please contact us as

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